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So, what does it take to move to online transactions via say, Paytm or freecharge?

A smartphone with e-wallet app

3G/4G internet connection

Strong network connectivity

A bank account/debit/credit card (to transfer payment)

To use debit/credit cards online, you need about the same things.

But here is some eye-opening data about India:

As of 31 July 2016, India had a tele-density of 83%. Bihar, Assam, Madhya Pradesh and Uttar Pradesh had tele-density of less than 70%;

There were only around 150 million internet connections at the end of March 2016 (3G and 4G connections included);

As of August 2016, India had 712.5 million debit cards, and 130.53 million transactions. As for credit cards, there were only 26.38 million in India accounting for 83.95 million transactions;

According to the Reserve Bank of India (RBI), as of August 2016, there were only 1,461,672 point of sale (PoS) machines in India. These are probably mostly in major cities.

Going by the above data, the existing infrastructure is nowhere near equipped to carry the weight of a nation simultaneously trying to go cashless.

Demonetisation will certainly lead to greater utilisation of cards and e-wallets... If a movement of raising awareness, technological developments and government intervention is put in place.

The government particularly has a large role to play. It needs to provide incentives for banks leading to the creation of better card acceptance infrastructure by deploying PoS terminals.

Incentives for IT security systems needs to be enhanced.

To bring new merchants, particularly small and marginal traders, grocery shops, etc. onto a digital platform, through incentives and concessions in service tax/GST for accepting digital transactions. And promote digital payments by incentivising customers with discounts, and tax rebates.

Going cashless will take time and a lot of public education. The smoothness of this transition depends on the government... Are they ready?

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